Money as a medium of transaction in the overlapping generations model

Bruce Smith

No 216, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: A definition of a transactions medium is proposed. This is that a transactions medium permits the attainment of otherwise unattainable resource allocations. It is shown that by this definition money can be a transactions medium in a pure exchange, overlapping generations economy. It is also shown that money is a transaction medium only if there are informational asymmetries of a particular type. Finally, it is shown that the set of economies for which money is a transactions medium is not isolated, in a well-defined sense.

Date: 1982
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:216

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